She was vomiting in the photo, that's pretty good evidence of that level of intoxication. The accused was also clearly recognisable[1] in the photo so it beggars belief that they could think there wasn't sufficient evidence.
Vomiting certainly does increase the Bayesian likelihood that she was intoxicated; whether it is enough to prove beyond a reasonable doubt that she was intoxicated to the point of being unable to consent is a different question. I have not, of course, seen the photo in question, nor do I know what witness statements may have indicated.
I'm not saying that Rehtaeh Parsons was not raped; only that when the police and prosecutors say that they do not think they could secure a conviction, I'm inclined to trust their expertise and knowledge of the case.
[1] “because he is easily recognizable in a photograph showing him raping the victim while she is visibly ill… why the RCMP decided these photographs aren’t evidence of rape is beyond us.” http://www.salon.com/2013/04/12/anonymous_on_rehtaeh_parsons...